One in four (15.5 million people) Brits have planned to make big ticket purchases in the last three months of the year to avoid the impending VAT increase, according to new research by Sainsbury's
Loans
The findings suggest that consumers are intending to collectively spend around £53 billion before January 4th 2011, which will see them save a staggering £1.1 billion on VAT.
The survey suggests the average spend per person during the three month period is expected to be £3,426, whilst eight per cent of those who intend to make big ticket purchases (equivalent to almost 1.2 million people) said they would splash out over £5,000.
This includes over 670,000 people (four per cent) who say they will part with over £10,000 in the period. Thirty seven per cent of adults in the South East of the country planned to make a big purchase, compared to only 24 per cent of those in the North East.
The most popular item that people suggested they'd buy is clothing, with eight per cent of adults saying they would deliberately buy clothes before January 4th, seven per cent intending to book a holiday, and the same number planning to buy IT equipment.
Seven per cent also said they would purchase music, audiovisual or home entertainment equipment for this reason, with six per cent intending to buy white goods.
A significant number of people also intend to make home improvements to save themselves money on VAT, with three per cent of people saying they'd have some building work carried out such as a loft conversion or conservatory.
Two per cent of people intended to fit a bathroom and the same number planned to buy a new kitchen.
One in 10 people (10 per cent) admitted they weren't aware that the VAT increase was taking place.
"It's interesting that our research suggests there could be a huge number of people intending to make at least one big ticket purchase before the impending VAT increase,” said Steven Baillie, Head of
Loans, Sainsbury's Finance.
"The cold weather and snow seen around the country may well have a temporary effect on high street expenditure, but we expect that people will find a way to make their large planned purchases, including many who will shop online.
"Those who are planning to make a big purchase with a loan should extend their savviness to their finances and shop around for a loan that best suits their requirements. Otherwise, they could negate the savings they will make."
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Location
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Percentage of adults planning to purchase this before 4th January 2011 in order to pay less VAT*
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South East
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37%
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|
London
|
36%
|
|
Yorkshire & the Humber
|
36%
|
|
Wales
|
35%
|
|
West Midlands
|
34%
|
|
Scotland
|
33%
|
|
North West
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31%
|
|
South West
|
31%
|
|
East Midlands
|
30%
|
|
Eastern
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28%
|
|
North East
|
24%
|
* figures denote intention to buy
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